PROJECT SUMMARY Fracture healing is a well-orchestrated regenerative process that remains largely unknown. Revealing the cellular and molecular mechanisms governing fracture repair will help identify novel therapeutic targets to treat patients that suffer of non-unions, a clinically relevant problem that affects annually 600,000 people in the United States. Bone autografts, the gold-standard treatment for non-unions, have multiple drawbacks: they are invasive, costly, risky, and sometime ineffective. Therefore, there is an urgent and unmet need for alternative and novel therapies to treat non-unions. The ultimate goal of this proposal is to gain new knowledge on pivotal mechanisms driving fracture repair and to devise them to promote healing. The highly regenerative ability of bones after fracture implies the existence of adult progenitors that contribute to the reparative process. However, the nature and the expression pattern of these progenitors is still elusive. We have discovered a discrete population of perivascular cells expressing Prx1 (Prx1+) that reside in recognized regenerative niches. By investigating functionality, we have found that Prx1 and Prx1+ expressing cells contribute to the fracture repair process. We have also found that during fracture repair, Prx1+ cells co-express BMP2 and CXCL12. On the way to further explore this crosstalk, we discovered that the impaired fracture healing found in mice lacking a full complement of BMP2 in Prx1 osteochondroprogenitors, is characterized by a deranged angiogenesis associated with increased expressions for Prx1 and the cytokine CXCL12. These abnormalities were corrected by AMD3100, a CXCL12 receptor antagonist. Lastly, by using in vivo and in vitro approaches, we have indicated that BMP2 through CXCL12 signaling regulates Prx1 expression. Current knowledge and these exciting novel observations set the scientific premise to the central hypothesis of this proposal, namely that Prx1+ perivascular cells are a crossroad in fracture repair and their commitment to regeneration and their Prx1 expression pattern is regulated by a well- timed interplay between BMP2 and CXCL12. Two specific aims are proposed to test this novel hypothesis. Aim 1 is designed to determine the requirement of Prx1 and Prx1 expressing cells and their fate and nature during fracture repair. Aim 2 is designed to determine the mechanisms by which the expression of Prx1 and the fate of Prx1+cells is regulated by the interplay between BMP2 and CXCL12 during fracture repair. A comprehensive approach will be applied to accomplish the proposed aims, an approach combining generation of ad hoc genetically engineered mice; cell-tracing; educated use of animal models; pharmacological and cell transplant studies; and in vitro studies. A team of expert research investigators has been assembled to ensure successful achievement of the project. It is expected that the novel findings generated from this research will have major biomedical relevance and implications for: a) understanding of the cellular and molecular mechanisms governing fracture healing; and b) laying the groundwork for the development of pharmacological and cell-based clinical trials to treat non-unions.